Essays on Why, How and Under What Circumstances Do Firm Compete with Each Other on Price Assignment

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The paper "Why, How and Under What Circumstances Do Firm Compete with Each Other on Price" is a great example of an assignment on business. Firms compete together to make a healthy rivalry between themselves and other similar firms so that they are able to match with pricing and innovation. Every firm’ s goals are measured through revenue, profit, and market share growth. Firms are always on their toes to find ways to have the upper hand on other rival companies. Every company has a wish to maximize their profit or even better, close down other firms for their own sake to be able to increase their market share.

An example of a firm who have been successful with closing down another rival company is the Sports Direct Company, owned by Mike Ashley, who has his own controversial way of cutting prices to run a successful business. The price change can come from various reasons, with decisions made by firms during the course of their own business or firms even being forced into a decision due to related economic issues.

There are many reasons that will indicate why, how, and under what circumstances firms compete with each other on price. The two most common way firms’ compete with each other is by price competition and non-price competition. This involves competing with other firms by lowering and becoming the best priced compared to their rival firms’ products. By cutting prices, firms can further increase the amount of customers using their products in order to try to boost their sales and market share (Anon. , 2015). This can only be done with products that are price-elastic.

An example of this can be, the Sports Direct Company who has been able to close down other sportswear shops by lowering down to outrageous prices due to the company buying cheap goods from Asia. The company will need to do their research in the market to be able to buy cheap products so that they can still be able to make a profit. Firms can also compete with other firms with a non-price competition strategy, as they can compete with just the product features and quality instead of the price.

Innovation is key in this section as firms can evolve to a better and more efficient way in product development. Product development in different retail outlets can also help the firm become more efficient, which can be done by promoting campaigns to let the consumers know about their recent arrival.

References

Anon., 2015. Price Competition. [Online]

Available at: https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/pricing-8/competitive-dynamics-and-pricing-58/price-competition-291-7302/

[Accessed 30 June 2015].

Coughlin, A., 2015. Competing on price? Ten steps to success. [Online]

Available at: http://www.marketingdonut.co.uk/marketing/marketing-strategy/competing-on-price-ten-steps-to-success

[Accessed 30 June 2015].

Pettinger, T., 2013. Bertrand Competition. [Online]

Available at: http://www.economicshelp.org/blog/glossary/bertrand-competition/

[Accessed 30 June 2015].

Tice, C., 2011. Seven Ways to Avoid Competing On Price. [Online]

Available at: http://www.entrepreneur.com/article/220406

[Accessed 30 June 2015].

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